Monthly Bill Payments vs Yearly Bill Payments

Unfortunately bill payments are a part of everyday adult life, whether it is your mobile phone bill, your electricity bill or your car insurance bill they all need paying and they are all going to cost you money.

One thing I always look at when making bill payments is the payment frequency. Many companies allow you to pay your bills either monthly, quarterly, half yearly or annually. Often there can be big discounts available if you are prepared to pay the yearly cost up front instead of the monthly price. In some instances the discount can be as much as 10-15%.

Obviously paying bills yearly involves a much larger upfront cost, but if you can save 10-15% across even only a handful of your bills then over the course of your lifetime you are going to save a significant amount of money.

As an example – our private healthcare bill is around $2800 per year, but the monthly cost is $250. Now $250 per month might seem a lot more palatable than $2800, but it works out to be $3,000 per year $200 or 7% more expensive.

$200 over the course of an entire year might not sound like a lot of money, but this is only 1 bill… Anyone who has been reading my blog for any amount of time will know that I like to think long term when it comes to money, and I also expect to easily be able to make 3% per annum on any money that I am able to save.

If I continue to save $200 per year on this one bill and also get a return of 3% PA on my money, then in 30 years time I will have saved just over $9,500 just from this 1 bill. If I extrapolate that out to all the bills where I get a discount for paying yearly instead of monthly then I expect to be able to save significantly more than this.

Question?

Do you pay bills yearly or monthly? Do you get any discounts for paying yearly over monthly?

Hmm some of my bills are yearly, some are every six months, some are quarterly, and some are monthly! It really depends on the bill and how payment is set up, and oftentimes we have little say into the frequency of bill pay so I don’t think too much of it.

If I am getting a discounts especially anything 10% or higher I usually pay the long term bill. This is of course unless its is something i have never used before and I am doing the test run and making a decision. Those that i can pay earlier I will pay but not all places allow you to do so.Thomas | Your Daily Finance recently posted..When Is the Right Time to Change Jobs

We try and pay many of our bills in bulk as well, assuming that it makes sense for us. For the ones that do offer a nice discount, we do what we can to take advantage of it.John S @ Frugal Rules recently posted..Is Investing in the Stock Market Really That Easy?

We would totally pay our bills annually if we had the cash. The discount is too good to pass up. Once we kill our debt, we’ll pay all of that stuff yearly instead of monthly.Laurie @thefrugalfarmer recently posted..The Best Birthday Ever

I have no problem laying down the cash up front if I’m getting a good enough discount. I really haven’t looking into pre paying for any of our bills yet, but I should. I’ve also heard that many places give you a discount.Jake @ Common Cents Wealth recently posted..I’m Joining the Yakezie Challenge!

Our insurance bills are set up to pay once a year or semi-annually. Most everything else we pay month to month. I wouldn’t want to pay annually though for something that I might feel I would want to cancel before the year is up.Brian @ Luke1428 recently posted..Investing Made Easy (Part V): Common Investing Mistakes

I pay my health insurance annually. Car insurance too. And home contents insurance. If I ever do a boot camp or similar commitment, I like to pay for it all upfront. I’m pretty much against direct debit, even if I get a discount. I like to control my money, and who touches it! Even as a uni student, I paid a semester of rent upfront to save thinking about it – and of course I negotiated a discount!

My auto insurance bill has a yearly option and there is a discount for paying it up front like this – I think I’ll phone and find out how much we’d save if we were to start paying yearly. If there’s a good discount, then it’s totally worth it1Lindsey @ Cents & Sensibility recently posted..Ask Darwin: the answer to all your financial questions

Interesting. I pay almost all my bills monthly since I don`t see the difference in saving the money (for a lump-sum payment) or paying per month. None of my bills offer discounts when paid in full.Catherine recently posted..Erin Condren, Blog Update and Call For Guest Posters!

We pay all of our bills as they come due. The mortgage allowed us to pay more if we wanted which have already maxed out for the year. The only other bill would be our vehicle insurance. If we pay that upfront for the year there is a discount but since my wife is part of a professional association we don’t have to pay in full yet get the same monthly rate as if we did. If they offered a discount to pay up front I would provided I wouldn’t make any more investing it somewhere else.Canadian Budget Binder recently posted..How to budget as a couple

Most of my bills are monthly, if there were a way to save by paying annually I definitely would. I also try to ask smaller businesses if they’ll give me a discount when I pay for big items in cash (they save on the credit card fees that way).

I think your best bet is to save up for the year in advance and then pay yearly at the reduced price. You can keep doing this each year. The savings of $200 adds up when you consider the time period and interest rates.

I pay my electricity yearly meaning they do a meter reading once or twice a year and then charge the same amount for the following 6-12 months. It comes with a discount too and you know exactly what your future bills will be.Pauline recently posted..Make extra money: Rent your parking space

Most of my bills are monthly. I only have the option to pay a few yearly, but don’t really save that much when doing so. It all depends on the cash flow at the time.Debt Roundup recently posted..A Beginners Guide to Investing

I tend to pay in bulk if there are discounts and if the financial situation allows at the moment. Its not always possible. Then there are bills I delay and push to the very end of being threatened to pay! I always figure I can be doing something with the cash meanwhile, especially where there are no penalties for late payment! A risky move yes, but well worth it at times.Simon @ Modest Money recently posted..Credit Sesame Review – In Depth Review of Credit Sesame

Definitely a great thing to do if you have the initial front money to do it… though as daunting as it may sound to some to pay an entire bill a year upfront… many people do in-fact have more than enough at the time of their paycheck, it’s just all the things that we dwindle it away on that ultimately leaves us struggling or behind.

Also, it’s counter-intuitive, or rather… counter-urge – as in, you of course have the urge to keep your money and pay as little out as possible to what ‘feel’ like menial things or annoyances… or ‘boring’… we kind of spend (I think) fueled by emotion and the latest electricity bill doesn’t exactly get us jolted-up 😛

But if you can bite the bullet (I have on occasion – not an entire year but months at a time) then you definitely will reap the benefits… not just what may seem like the relatively small and initial financial saving over-time but it really does feel good when you’re ahead rather than behind and even though you had to pain THIS pay-cheque, you have all the more next time and can get even further ahead in another department… this is the dream, to stay exponentially ahead rather than perpetually behind and forever chasing or replacing.

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